Visitors view a BYD DM-i electric vehicle at the 2024 Beijing International Automobile Exhibition in Beijing, China, May 3, 2024. (Photo by Costfoto/NurPhoto via Getty Images)
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Shares in Chinese electric vehicle makers were largely soaring Thursday morning after the European Union announced the previous day that it would raise tariffs on Chinese-made electric vehicles by up to 38%.
Hong Kong Hang Seng Index The stock was up 1.23% at the start of trading, driven mainly by gains in EV stocks.
Electric vehicle maker BYD, the biggest gainer on the HSI, rose 8% in morning trading. Geely It increased by about 4%, Nio and Lee Auto The shares rose 1.75% and 2.67%, respectively. SAIC It fell by more than 2%.
One analyst noted that the EU tariffs are “modest” compared with US tariffs on Chinese EVs.
BYD vs Geely
The EU announced on Wednesday it would impose additional tariffs on Chinese electric vehicle makers that have a large footprint in Europe. BYD China’s automaker will be hit with a 17.4% tariff, while Geely will be hit with a 20% tariff. SAIC will have to pay the highest tariff of 38.1% – this is on top of the standard tariffs. Imported EVs already face a 10% tariff..
All three manufacturers have been sampled in the ongoing EU investigation.
Other Chinese EV companies that cooperated with the investigation but were not sampled will be subject to an additional 21 percent tariff, while those that did not cooperate with the investigation will be subject to an additional 38.1 percent tariff, the committee said.
The EU statement The Commission tentatively concluded that Chinese EV makers were benefiting from “unjustified subsidies” that posed a “threat of economic harm” to the EU’s EV industry.
“The move is modest compared to the harsh 100% tariffs on Chinese-made EV imports into the US that the Joe Biden administration increased from 25% last month, and the 25% interim tariffs are in line with market expectations of 20%-25%,” Morningstar equity analyst Vincent Sun said in a note on Wednesday.
The tariffs were imposed after the EU launched an investigation in October. The commission said in a statement that the tariffs are currently temporary but will be introduced from July 4 if talks with Chinese authorities fail to reach a resolution. Formal measures will be put in place within four months of the introduction of the temporary tariffs, the EU said.
Joseph Webster, a senior fellow at the Atlantic Council’s Global Energy Center, said the EU “appears to be warning” China-owned SAIC that it could face tariffs if it doesn’t build production facilities in Europe.
“China’s SAIC Group has been hit with the highest tariffs of 38.1 percent. The automaker has a limited base on the continent and is yet to choose a location for its first European production facility despite nearly a year of consideration,” Webster said. Wednesday Report.
“BYD and Geely are both investing heavily in Europe,” Webster said.
In December, BYD New EV factory to be built in Hungary After opening Electric bus manufacturing planGeely Automobile owns Swedish carmaker Volvo and has begun moving production of some vehicles from China to Belgium.
–CNBC’s Lim Hui Jie contributed to this report.
